Tax-Exemption for Clergy Homes is Unconstitutional
So says Judge Barbara Crabb of the US District Court for the Western District of Wisconsin. She’s just a District Court judge, so the US Government (who lost the case filed by the Freedom From Religion Foundation) could appeal.
I don’t think that they will. Some estimates suggest that the US loses more than 70 billion dollars to this tax exemption each year. To put that in perspective, that’s a larger figure than the 2013 budget for the National Science Foundation, the EPA, NASA, the departments of Energy, Interior, and Commerce, and all federal assistance from US disasters… combined.
What this ruling applies to is that many ministers/clergy receive a home (parsonage) as part of their benefits for being the minister at a church. Usually, the church owns the home and ‘gives’ it to the pastor during their period of service at the church. Alternately, the church provides a supplement to pastor’s pay for use in acquiring a dwelling.
Under US law, that is considered an ‘income’.
which excludes from gross income a minister’s “rental allowance paid to him as part of his compensation.”
Also from the ruling
However, the significance of the benefit simply underscores the problem with the law, which is that it violates the well-established principle under the First Amendment that “[a]bsent the most unusual circumstances, one’s religion ought not affect one’s legal rights or duties or benefits.
The judge very cleverly worded her opinion to emphasize that it is the religious nature of the benefit which is against the Constitution and noted
If a statute imposed a tax solely against ministers (or granted an exemption to everyone except ministers) without a secular reason for doing so, that law would violate the Constitution just as §107(2) does. Stated another way, if the government were free to grant discriminatory tax exemptions in favor of religion, then it would be free to impose discriminatory taxes against religion as well. Under the First Amendment, everyone is free to worship or not worship,believe or not believe, without government interference or discrimination, regardless what the prevailing view on religion is at any particular time, thus “preserving religious liberty to the fullest extent possible in a pluralistic society.”
This is an excellent (and obvious) decision. I think that the US government will quietly let this pass without an appeal. While, I would like to think that this for the right reasons (i.e. because it’s against the Constitution), I suspect that there are about 70 billion reasons why they will let this one slide.
Further, I suspect that this will open the door to further lawsuits against religions for their tax exempt status… especially considering the recent (and blatant) intrusion into politics.
At least one estimate suggests that religions generate an income each year in excess of 100 billion dollars. Since they purchase no raw materials for a product, then their net is very, very close to that. Of course, they also have about 300-500 billion in US property that is untaxed as well. No one knows exactly how much property is held by churches because they don’t even have to report it.
And you know what?
People like me, someone who abhors the churches and their religions, are paying for it.
This website suggests that tax churches would be a bad thing. Because it would reduce the amount of charitable works by churches and it would reduce the number of churches, thereby reducing the taxable income each year.
By that same argument, we should tax people like me either. I give to charity and my taxes determine (in part) how much I have to give. And of course, if I stop paying taxes, then I lose my house and my job and my car and my freedom.
What this would more likely do is reduce the number of churches that specifically built to be scams and/or money laundering operations. There will always be churches and religions. But reducing them and preventing the kinds of issues that they generate can only help the country as a whole.